PROSPECTUS SUPPLEMENT
(To Prospectus dated November 1, 1994)
$200,000,000
Chrysler Financial Corporation [logotype]
8 1/8% NOTES DUE DECEMBER 15, 1996
Interest on the Notes is payable semiannually on each June 15 and December
15, beginning June 15, 1995. The Notes are not redeemable prior to
maturity and will mature on December 15, 1996.
The Notes will be issued only in fully registered form and will be
represented by one or more Global Securities registered in the name of a
nominee of The Depository Trust Company, as depositary (the "Depositary").
Beneficial interests in the Notes will be shown on, and transfers thereof
will be effected only through, the records maintained by the Depositary's
participants. Except as described in "Description of Notes -- Book-Entry
System," owners of beneficial interests in the Notes will not be entitled
to receive Notes in definitive form and will not be considered the holders
thereof. The Notes will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity
will therefore settle in immediately available funds. All payments of
principal and interest will be made by Chrysler Financial Corporation (the
"Company") in immediately available funds. See "Description of Notes --
Same-Day Settlement and Payment."
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION
PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS SUPPLEMENT OR THE
PROSPECTUS TO WHICH IT RELATES. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
=========================================================================
Price to Underwriting Proceeds to the
Public(1) Discount(2) Company(1)(3)
Per Note.................... 99.917% .300% 99.617%
Total....................... $199,834,000 $600,000 $199,234,000
<FN>
=========================================================================
(1) Plus accrued interest, if any, from December 12, 1994.
(2) The Company has agreed to indemnify the Underwriters against certain
liabilities under the Securities Act of 1933. See "Underwriting."
(3) Before deducting expenses payable by the Company estimated at
$140,000.
The Notes are offered subject to receipt and acceptance by the
Underwriters, to prior sale and to the Underwriters' right to reject any
order in whole or in part and to withdraw, cancel or modify the offer
without notice. It is expected that delivery of the Global Securities will
be made through the facilities of the Depositary on or about December 12,
1994.
SALOMON BROTHERS INC
BEAR, STEARNS & CO. INC.
MERRILL LYNCH & CO.
The date of this Prospectus Supplement is December 5, 1994.
IN CONNECTION WITH THIS OFFERING, THE UNDERWRITERS MAY OVER-ALLOT OR
EFFECT TRANSACTIONS WHICH STABILIZE OR MAINTAIN THE MARKET PRICE OF THE
SECURITIES OFFERED HEREBY AT A LEVEL ABOVE THAT WHICH MIGHT OTHERWISE
PREVAIL IN THE OPEN MARKET. SUCH STABILIZING, IF COMMENCED, MAY BE
DISCONTINUED AT ANY TIME.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE
COMMISSIONER OF INSURANCE FOR THE STATE OF NORTH CAROLINA NOR HAS THE
COMMISSIONER PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS
SUPPLEMENT OR THE PROSPECTUS.
The following information concerning the Company and Chrysler
Corporation ("Chrysler") supplements the information contained in the
Prospectus and any statement contained in the Prospectus shall be deemed
to be modified or superseded to the extent that a statement contained in
this Prospectus Supplement modifies or supersedes such statement. The
following information with respect to the Company is qualified in its
entirety by the more detailed information set forth in the Company's most
recent Annual Report on Form 10-K and its most recent Quarterly Report on
Form 10-Q, which are incorporated by reference in this Prospectus.
CHRYSLER FINANCIAL CORPORATION
GENERAL
The Company's earnings before taxes were $82 million and $226
million for the three and nine months ended September 30, 1994, which
compares to $64 million and $176 million for the comparable periods of
1993, before the cumulative effect of changes in accounting principles.
The increase in 1994 earnings before taxes and accounting changes resulted
from higher levels of automotive financing and lower costs of bank
facilities, partially offset by reduced retail automotive margins.
The Company's net earnings were $50 million and $141 million for the
three and nine months ended September 30, 1994, compared to $22 million
and $73 million in the comparable periods of 1993. Net earnings for the
nine months ended September 30, 1993 included charges totaling $30 million
from the adoption of Statement of Financial Accounting Standards ("SFAS")
No. 106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions," and SFAS No. 112, "Employers' Accounting for Postemployment
Benefits." Net earnings for the three and nine months ended September 30,
1993 were reduced by a $16 million charge related to the recognition of
the retroactive increase in the U.S. corporate tax rate.
SELECTED INTERIM FINANCIAL INFORMATION
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
1994 1993 1994 1993
Earnings Statement Data: (in millions of dollars)
Total interest income...................... $329 $354 $984 $1,076
Interest expense .......................... 178 186 556 613
Interest margin............................ 151 168 428 463
Other revenues............................. 164 153 465 474
Operating expenses......................... 108 121 338 348
Provision for credit losses................ 71 57 162 169
Earnings before income taxes and cumulative
effect of changes in accounting
principles................................ 82 64 226 176
Cumulative effect of changes in accounting
principles (1)............................ -- -- -- (30)
Net earnings (2)........................... 50 22 141 73
At September 30,
(unaudited)
1994 1993
Balance Sheet Data: (in millions of dollars)
Finance receivables -- net................................ $ 8,956 $ 8,863
Cash and cash equivalents................................. 170 254
Marketable securities..................................... 337 339
Retained interests in sold receivables and other related
amounts -- net........................................... 4,723 2,884
Repossessed collateral.................................... 240 241
Property and equipment leased to others -- at cost less
accumulated depreciation................................. 530 730
Other assets.............................................. 405 500
Total assets.......................................... $15,361 $13,811
Short-term notes (primarily commercial paper)............. $ 3,114 $ 2,498
Bank borrowings under revolving credit facilities......... -- 177
Senior term debt.......................................... 5,768 4,214
Subordinated term debt.................................... 27 242
Other debt................................................ 569 361
Accounts payable, accrued expenses and other ............. 1,048 1,154
Amounts due to affiliated companies....................... 15 570
Deferred income taxes..................................... 1,572 1,524
Total liabilities..................................... 12,113 10,740
Shareholder's investment:
Par Value of outstanding Common Stock................... 25 25
Additional paid-in capital.............................. 1,168 1,168
Retained earnings....................................... 2,055 1,878
Total shareholder's investment (3).................... 3,248 3,071
Total liabilities and shareholder's investment ....... $15,361 $13,811
<FN>
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(1) The after-tax charge of $30 million is due to the adoption of SFAS No.
106 and SFAS 112 in the first quarter of 1993.
(2) Net earnings for the three and nine months ended September 30, 1993
include a $16 million unfavorable adjustment to net earnings related
to the recognition of the retroactive increase in the U.S. corporate
tax rate.
(3) During the third quarter of 1994, the Company paid a $16 million
dividend on its common stock.
CREDIT LOSS EXPERIENCE
The following tables set forth certain information regarding the
Company's net loss experience and the Company's annualized percent of net
losses to average gross receivables outstanding for the periods indicated:
Net Loss Experience
Excluding Sold Receivables(1) Including Sold Receivables(2)
Nine Months Ended Nine Months Ended
September 30 (Unaudited) September 30 (Unaudited)
1994 1993 1994 1993
(in millions of dollars)
Automotive financing............ $10 $ 23 $ 76 $ 75
Nonautomotive financing......... 28 67 30 72
Total....................... $38 $ 90 $106 $147
Annualized Percent of Net Losses to
Average Gross Receivables Outstanding
Excluding Sold Receivables(1) Including Sold Receivables(2)
Nine Months Ended Nine Months Ended
September 30 (Unaudited) September 30 (Unaudited)
1994 1993 1994 1993
Automotive financing............ 0.10% 0.25% 0.37% 0.40%
Nonautomotive financing......... 1.05% 2.01% 1.01% 1.80%
Total....................... 0.31% 0.71% 0.45% 0.65%
<FN>
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(1) Wholesale receivables outstanding includes previously sold
receivables.
(2) Includes net losses on receivables previously sold subject to limited
recourse provisions.
RATIOS OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of the Company on a
consolidated basis and Chrysler on a consolidated basis for the nine
months ended September 30, 1994 and September 30, 1993 were as follows:
Nine Months Ended
September 30
(Unaudited)
1994 1993
The Company Consolidated.................... 1.40X 1.28X
Chrysler Consolidated....................... 5.37X 3.31X
The Company Consolidated. The ratios of earnings to fixed charges
have been computed by dividing earnings before income taxes and fixed
charges by fixed charges. Fixed charges consist of interest, amortization
of debt discount and expense, and rentals. Rentals included in fixed
charges are the portion of total rent expense representative of the
interest factor (deemed to be one-third).
Chrysler Consolidated. For the purpose of computing the ratios of
earnings to fixed charges, earnings are determined by adding back fixed
charges to consolidated earnings from continuing operations (including
equity in net earnings of unconsolidated subsidiaries) before taxes on
income and excluding undistributed earnings from less than 50% owned
affiliates. Fixed charges consist of interest expense, credit line
commitment fees, and interest portion of rent expense.
INFORMATION CONCERNING CHRYSLER CORPORATION
Chrysler reported earnings before income taxes of $1,063 million for
the third quarter of 1994, compared with $612 million for the third
quarter of 1993. For the first nine months of 1994, Chrysler reported
earnings before income taxes and the cumulative effect of changes in
accounting principles of $4.2 billion, compared with $2.6 billion for the
comparable period of 1993. Pretax earnings for the third quarter and first
nine months of 1993 included gains on sales of automotive assets and
investments of $94 million and $265 million, respectively.
The improvement in operating results in the third quarter and first
nine months of 1994 over the corresponding periods of 1993 resulted from
an increase in sales volume and pricing actions, including lower per unit
sales incentives, partially offset by increased profit-based employee
costs. Chrysler's worldwide factory car and truck sales for the three and
nine months ended September 30, 1994 increased 15 percent and 12 percent,
respectively, over the comparable 1993 periods. Combined U.S. and Canadian
dealers' days supply of vehicle inventory was 54 days at September 30,
1994, as compared to 63 days at December 31, 1993 and 54 days at September
30, 1993.
Net earnings for the third quarter of 1994 were $651 million, or
$1.76 per common share, compared with $423 million, or $1.13 per common
share, in the third quarter of 1993. Net earnings for the third quarter of
1993 included a $51 million favorable adjustment to the income tax
provision to reflect the 35 percent U.S. federal income tax rate, which
included an adjustment of Chrysler's deferred tax assets and liabilities,
partially offset by an increased income tax provision on 1993 earnings.
Net earnings for the nine months ended September 30, 1994 were $2.5
billion, compared to a net loss of $3.3 billion for the comparable period
of 1993. The net loss for the first nine months of 1993 resulted from a
charge of $4.7 billion for the cumulative effect of a change in accounting
principle related to the adoption of SFAS No. 106. Results for the first
nine months of 1993 also included a charge of $283 million for the
cumulative effect of a change in accounting principle relating to the
adoption of SFAS No. 112.
SELECTED INTERIM FINANCIAL INFORMATION OF CHRYSLER
The results of operations and balance sheet data set forth below for
Chrysler and its consolidated subsidiaries reflect the full consolidation
of the accounts of all significant majority-owned subsidiaries and
entities over which Chrysler and its consolidated subsidiaries have a
controlling financial interest.
Three Months Ended Nine Months Ended
September 30, September 30,
(unaudited) (unaudited)
1994 1993 1994 1993
Results of Operations Data (in millions of dollars)
Sales of manufactured products........... $10,938 $ 8,995 $35,858 $29,540
Finance and insurance income............. 323 352 996 1,087
Other income............................. 398 366 1,110 1,021
Total Sales and Revenues................. 11,659 9,713 37,964 31,648
Total Costs and Expenses................. 10,596 9,101 33,765 29,034
Earnings Before Income Taxes and
Cumulative Effect of Changes in
Accounting Principles................... 1,063 612 4,199 2,614
Provision for income taxes............... 412 189 1,654 976
Earnings Before Cumulative Effect of
Changes in Accounting Principles........ 651 423 2,545 1,638
Cumulative effect of changes in
accounting principles................... -- -- -- (4,966)
Net Earnings (Loss)...................... 651 423 2,545 (3,328)
Preferred stock dividends................ 20 20 60 60
Net Earnings (Loss) on Common Stock...... $ 631 $ 403 $ 2,485 $(3,388)
Primary earnings (loss) per common share: (in dollars or millions of shares)
Earnings before cumulative effect of
changes in accounting principles...... $ 1.76 $ 1.13 $ 6.92 $ 4.61
Cumulative effect of changes in
accounting principles................. -- -- -- (14.50)
Net earnings (loss) per common share... $ 1.76 $ 1.13 $ 6.92 $ (9.89)
Average common and dilutive equivalent
shares outstanding.................... 358.8 357.9 359.3 342.5
Fully diluted earnings per common share:
Earnings before cumulative effect of
changes in accounting principles...... $ 1.60 $ 1.04 $ 6.24 $ --
Cumulative effect of changes in
accounting principles................. -- -- -- --
Net earnings per common share.......... $ 1.60 $ 1.04 $ 6.24 $ --
Average common and dilutive equivalent
shares outstanding.................... 407.4 406.2 407.8 --
Common stock dividends declared.......... $ 0.25 $ 0.15 $ 0.70 $ 0.45
At September 30,
(unaudited)
1994 1993
Balance Sheet Data (in millions of dollars)
Cash, cash equivalents and marketable securities........... $ 7,137 $ 4,889
Total assets............................................... 46,506 41,672
Total debt................................................. 11,919 11,394
Shareholders' equity....................................... 9,044 6,007
DESCRIPTION OF NOTES
The following description of the particular terms of the Notes
supplements, and to the extent inconsistent therewith replaces, the
description of the general terms and provisions of the Debt Securities set
forth in the Prospectus, to which description reference is hereby made.
GENERAL
The Notes are to be issued under an Indenture dated as of February
15, 1988, as amended (the "Indenture"), between the Company and
Manufacturers Hanover Trust Company, which has been succeeded by United
States Trust Company of New York as successor Trustee (the "Trustee").
The Notes will be limited to an aggregate principal amount of
$200,000,000 and will mature on December 15, 1996. Under the Indenture,
any payment of principal or interest required to be made in respect of a
Note on a date that is not a Business Day for such Note need not be made
on such date, but may be made on the next succeeding Business Day with the
same force and effect as if made on such date, and no additional interest
shall accrue as a result of such delayed payment. The Notes will bear
interest at the rate of 8 1/8% per annum from December 12, 1994 or from
the most recent Interest Payment Date to which interest has been paid or
provided for, payable semiannually in arrears on each June 15 and
December 15 or, if such day is not a Business Day, on the next succeeding
Business Day, beginning June 15, 1995, and at maturity to the persons in
whose names the Notes (or any Predecessor Securities) are registered at
the close of business on June 1 or December 1, as the case may be,
immediately preceding such Interest Payment Date or, in the case of
interest payable at maturity, to the persons to whom principal shall be
payable. Interest payments on the Notes will be computed on the basis of a
360-day year of twelve 30-day months.
As used herein, "Business Day" means any day, other than a Saturday
or Sunday, on which banking institutions in The City of New York are not
authorized or obligated by law to close.
The Notes are not redeemable at the option of the Company prior to
maturity and do not provide for any sinking fund.
Notes will be issued in registered form and will rank pari passu
with all existing and future unsecured and unsubordinated indebtedness of
the Company. The Notes, which upon issuance will be represented by one or
more Global Securities, are being offered in denominations of $1,000 and
any integral multiple thereof. Payment of the purchase price of a Note may
be made, and payment of the principal of and interest on the Notes will be
made, only in U.S. dollars.
See the Prospectus for a further description of the Trustee and the
Notes, including the covenants, modification provisions and events of
default relating to the Notes.
BOOK-ENTRY SYSTEM
Upon issuance, the Notes will be represented by one or more Global
Securities deposited with, or on behalf of, the Depositary. The Global
Securities representing the Notes will be registered in the name of a
nominee of the Depositary. Upon issuance, the Depositary will credit, on
its book-entry registration and transfer system, the respective principal
amounts of the Notes represented by the Global Securities to the accounts
of institutions that have accounts with the Depositary ("participants"),
and ownership of beneficial interests in the Global Securities will be
limited to participants or persons that may hold interests through
participants. Except under the circumstances described in the Prospectus
under "Description of Debt Securities -- Global Securities," the Notes
will not be issuable in definitive form. As long as the Notes are
represented by Global Securities, the Depositary's nominee will be
considered the sole owner or holder of the Notes for all purposes under
the Indenture, and the beneficial owners of the Notes will be entitled
only to those rights and benefits afforded to them in accordance with the
following summary and with the Depositary's regular operating procedures.
So long as the Depositary or its nominee is the sole owner of the Global
Securities, principal and interest payments on the Notes will be made to
the Depositary or its nominee, as the case may be, as the registered owner
or holder of the Global Securities representing the Notes. The Company
expects that the Depositary, upon receipt of any payment of principal or
interest in respect of the Global Securities, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective interests in the principal amount of the Global Securities as
shown on the records of the Depositary.
The Depositary has advised the Company and the Underwriter as
follows: the Depositary is a limited-purpose trust company organized under
the laws of the State of New York, a member of the Federal Reserve System,
a "clearing corporation" within the meaning of the New York Uniform
Commercial Code and a "clearing agency" registered pursuant to the
provisions of Section 17A of the Securities Exchange Act of 1934, as
amended. The Depositary was created to hold securities for its
participants and to facilitate the clearance and settlement of securities
transactions among its participants in such securities through electronic
book-entry changes in accounts of the participants, thereby eliminating
the need for physical movements of securities certificates. The
Depositary's participants include securities brokers and dealers
(including the Underwriters), banks, trust companies, clearing
corporations and certain other organizations, some of whom (and/or their
representatives) own the Depositary. Access to the Depositary's book-entry
system is also available to other entities, such as banks, brokers,
dealers and trust companies, that clear through or maintain a custodial
relationship with a participant, either directly or indirectly.
A further description of the Depositary's procedures with respect to
Global Securities is set forth in the Prospectus under "Description of
Debt Securities -- Global Securities." The Depositary has confirmed to the
Company, the Underwriters and the Trustee that it intends to follow such
procedures with respect to the Notes.
SAME-DAY SETTLEMENT AND PAYMENT
Settlement for the Notes will be made by the Underwriters in
immediately available funds. All payments of principal and interest will
be made by the Company in immediately available funds.
Secondary trading in long-term notes and debentures of corporate
issuers is generally settled in clearing-house or next-day funds. In
contrast, the Notes will trade in the Depositary's Same-Day Funds
Settlement System until maturity, and secondary market trading activity in
the Notes will therefore be required by the Depositary to settle in
immediately available funds. No assurance can be given as to the effect,
if any, of settlement in immediately available funds on trading activity
in the Notes.
UNDERWRITING
The Underwriters named below have severally agreed to purchase from
the Company the following respective principal amount of the Notes:
Principal
Amount
Underwriter of Notes
Salomon Brothers Inc ....................................... $ 66,700,000
Bear, Stearns & Co. Inc. ................................... 66,650,000
Merrill Lynch, Pierce, Fenner & Smith
Incorporated.................................... 66,650,000
Total................................................. $200,000,000
The Underwriting Agreement provides that the obligations of the
Underwriters are subject to certain conditions precedent. In the event of
default by one of the Underwriters, the Underwriting Agreement provides
that in certain circumstances the commitment of the non-defaulting
Underwriters may be increased or the Underwriting Agreement may be
terminated.
The Company has been advised by the Underwriters that the
Underwriters propose to offer the Notes to the public initially at the
public offering price set forth on the cover page of this Prospectus
Supplement and to certain dealers at such price less a concession of .175%
of the principal amount of the Notes; that the Underwriters and such
dealers may allow a discount of .125% of such principal amount on sales to
certain other dealers; and that after the initial public offering the
public offering price and concession and discount to dealers may be
changed by the Underwriters.
The Company has agreed to indemnify the Underwriters against certain
liabilities, including civil liabilities under the Securities Act of 1933,
or contribute to payments which the Underwriters may be required to make
in respect thereof. The Company currently has no intention to list the
Notes on any securities exchange, and there can be no assurance given as
to the liquidity of the trading market for the Notes.
PROSPECTUS
- ----------
CHRYSLER FINANCIAL CORPORATION [logotype]
Debt Securities and Warrants
Chrysler Financial Corporation (the "Company") may offer from time
to time its debt securities consisting of senior debentures, notes, bonds
and/or other evidences of indebtedness ("Debt Securities"), and warrants
to purchase Debt Securities ("Warrants") up to an aggregate initial public
offering price of approximately $7,576,975,850 or the equivalent thereof
in one or more foreign currencies or composite currencies. Debt Securities
and Warrants may be offered, separately or together, in separate series in
amounts, at prices and on terms to be set forth in supplements to this
Prospectus. Unless otherwise provided in any such supplement, the Debt
Securities and Warrants will be sold only for U.S. dollars, and the
principal of and any interest on the Debt Securities will likewise be
payable only in U.S. dollars.
The Debt Securities will rank pari passu in right of payment with
all existing and future unsecured and unsubordinated indebtedness of the
Company. See "Description of Debt Securities".
Debt Securities of a series may be issuable in registered form
without coupons ("Registered Securities"), in bearer form with coupons
attached ("Bearer Securities") or in the form of one or more global
securities (each a "Global Security"). Warrants of a series may be
issuable in registered form ("Registered Warrants") and may be issuable in
bearer form ("Bearer Warrants"). Bearer Securities and Bearer Warrants
will be offered only to non-United States persons and to offices located
outside the United States of certain United States financial institutions.
The terms of the Debt Securities and/or Warrants in respect of which
this Prospectus is being delivered, including, where applicable, the
specific designation, aggregate principal amount, currency, denominations,
maturity, premium, rate (which may be fixed or variable) and time of
payment of interest, the nature of any liens securing the Debt Securities,
terms for redemption at the option of the Company or the holder, terms for
sinking fund payments, terms for exercising the Warrants, the initial
public offering price, the names of, and the principal amounts to be
purchased by, underwriters and the compensation of any agents and
underwriters and other terms in connection with the offering and sale of
such Debt Securities and/or Warrants are set forth in the accompanying
Prospectus Supplement (the "Prospectus Supplement").
The Company may offer and sell Debt Securities and Warrants,
separately or together, to or through underwriters, and also may offer and
sell Debt Securities and Warrants, separately or together, directly to
other purchasers or through agents. See "Plan of Distribution". If any
agents of the Company or any underwriters are involved in the sale of any
Debt Securities in respect of which this Prospectus is being delivered,
the names of such agents or underwriters and any applicable commissions or
discounts will be set forth in the applicable Prospectus Supplement. The
net proceeds to the Company from such sale also will be set forth in the
applicable Prospectus Supplement. This Prospectus may not be used to
consummate sales of Debt Securities or Warrants unless accompanied by a
Prospectus Supplement.
----------------
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION NOR HAS THE
SECURITIES AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COM-
MISSION PASSED UPON THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
ANY REPRESENTATION TO THE CONTRARY IS A CRIMINAL OFFENSE.
----------------
The date of this Prospectus is November 1, 1994.
AVAILABLE INFORMATION
The Company and Chrysler Corporation are subject to the
informational requirements of the Securities Exchange Act of 1934, as
amended (the "Exchange Act"), and, in accordance therewith, file reports
and other information with the Securities and Exchange Commission (the
"Commission"). Such reports and other information may be inspected and
copies may be obtained at the principal office of the Commission at Room
1024, Judiciary Plaza, 450 Fifth Street, N.W., Washington D.C. 20549 and
at the following regional offices of the Commission: Northwestern Atrium
Center, Suite 1400, 500 West Madison Street, Chicago, Illinois 60661-2511;
and Seven World Trade Center, 13th Floor, New York, New York, 10048.
Copies of such material can be obtained from the Public Reference Section
of the Commission at Room 1024, 450 Fifth Street, N.W., Washington, D.C.
20549, at prescribed rates. Reports and other information concerning the
Company can be inspected at the offices of the New York Stock Exchange,
Inc., 20 Broad Street, New York, New York 10005, on which certain of the
Company's debt securities are listed.
The Company has filed with the Commission a Registration Statement
under the Securities Act of 1933, as amended (the "Securities Act"), with
respect to the Debt Securities and Warrants offered hereby. This
Prospectus does not contain all of the information included in the
Registration Statement and the exhibits and schedules thereto. For further
information with respect to the Company and the Debt Securities and
Warrants, reference is hereby made to the Registration Statement and the
exhibits and schedules thereto.
INCORPORATION OF CERTAIN DOCUMENTS BY REFERENCE
The Company's Annual Report on Form 10-K for its fiscal year ended
December 31, 1993, Quarterly Reports on Form 10-Q for the quarters ended
March 31, 1994, June 30, 1994 and September 30, 1994, and Current Reports
on Form 8-K dated January 18, 1994, April 19, 1994, May 23, 1994, July 14,
1994 and October 11, 1994, which were previously filed with the Commission
pursuant to the Exchange Act, are incorporated herein by reference.
All documents filed by the Company pursuant to Section 13(a), 13(c),
14 or 15(d) of the Exchange Act subsequent to the date of this Prospectus
and prior to the termination of the offering of the Debt Securities and
Warrants shall be deemed to be incorporated by reference into this
Prospectus and to be a part hereof from the date of filing such documents.
Any statement contained in a document incorporated or deemed to be
incorporated by reference herein shall be deemed to be modified or
superseded for purposes of this Prospectus to the extent that a statement
contained herein, in the accompanying Prospectus Supplement or in any
other subsequently filed document which also is or is deemed to be
incorporated by reference herein modifies or supersedes such statement.
Any statement so modified or superceded shall not be deemed, except as so
modified or superceded, to constitute a part of this Prospectus.
THE COMPANY WILL PROVIDE WITHOUT CHARGE TO EACH PERSON TO WHOM A
COPY OF THIS PROSPECTUS IS DELIVERED, UPON WRITTEN OR ORAL REQUEST, A COPY
OF ANY AND ALL DOCUMENTS INCORPORATED BY REFERENCE AS A PART OF THE
REGISTRATION STATEMENT, OTHER THAN EXHIBITS TO SUCH DOCUMENTS UNLESS SUCH
EXHIBITS ARE SPECIFICALLY INCORPORATED BY REFERENCE INTO THE INFORMATION
THAT THE PROSPECTUS INCORPORATES. REQUESTS SHOULD BE DIRECTED TO: OFFICE
OF THE SECRETARY, CHRYSLER FINANCIAL CORPORATION, 27777 FRANKLIN ROAD,
SOUTHFIELD, MICHIGAN 48034 (TELEPHONE: (810) 948-3060).
THE COMMISSIONER OF INSURANCE OF THE STATE OF NORTH CAROLINA HAS NOT
APPROVED OR DISAPPROVED THIS OFFERING NOR HAS THE COMMISSIONER PASSED UPON
THE ACCURACY OR ADEQUACY OF THIS PROSPECTUS.
CHRYSLER FINANCIAL CORPORATION
GENERAL
The Company is a financial services organization engaged in
automotive retail and wholesale financing, servicing commercial leases and
loans, secured small business financing, property, casualty and other
insurance, and automotive dealership facility development and management.
All of the Company's common stock is owned by Chrysler Corporation, a
Delaware corporation (together with its subsidiaries, "Chrysler"). The
Company's primary objective is to provide financing for automotive dealers
and retail purchasers of Chrysler's products. The Company sells
significant amounts of automotive receivables acquired in transactions
subject to limited recourse provisions. The Company remains as servicer to
such receivables for which it is paid a servicing fee. At the end of 1993,
the Company had nearly 3,100 employees and its portfolio of receivables
managed, which includes receivables owned and serviced for others, totaled
$28.3 billion. The Company's executive offices are located at 27777
Franklin Road, Southfield, Michigan 48034; telephone (810) 948-3060.
The Company's financial condition and liquidity improved during 1993
as it regained full access to the investment grade debt markets. In
addition, the Company realized aggregate cash proceeds of $2.4 billion
from the sales of certain nonautomotive assets during 1993. At December
31, 1993, approximately 88 percent of the Company's portfolio of
receivables managed was automotive-related. The sales of nonautomotive
assets over the last two years has made the Company more dependent upon
Chrysler. Thus, lower levels of production and sales of Chrysler
automotive products would likely result in a reduction in the level of
finance operations of the Company. See "Information Concerning Chrysler
Corporation."
THIS PROSPECTUS CONTAINS BRIEF SUMMARIES OF CERTAIN MORE DETAILED
INFORMATION CONTAINED IN DOCUMENTS INCORPORATED HEREIN BY REFERENCE. SUCH
SUMMARIES ARE QUALIFIED IN THEIR ENTIRETY BY THE MORE DETAILED INFORMATION
CONTAINED IN THE INCORPORATED DOCUMENTS.
COMPANY OPERATIONS
The Company's portfolio of finance receivables managed includes
receivables owned and receivables serviced for others. Receivables
serviced for others primarily represent sold receivables which the Company
services for a fee. At December 31, 1993, receivables serviced for others
accounted for 69% of the Company's portfolio of receivables managed. Total
finance receivables managed at the end of each of the five most recent
years were as follows:
1993 1992 1991 1990 1989
(in millions of dollars)
Automotive financing......... $25,011 $22,481 $24,220 $25,117 $24,648
Nonautomotive financing...... 3,251 7,657 9,486 10,709 10,763
Total........................ $28,262 $30,138 $33,706 $35,826 $35,411
Automotive Financing. The Company conducts its automotive finance
business principally through its subsidiaries Chrysler Credit Corporation,
Chrysler Credit Canada Ltd., and, in Mexico, Chrysler Comercial S.A. de
C.V. (collectively, "Chrysler Credit"). Chrysler Credit is the major
source of automobile and light duty truck wholesale (also referred to as
"floor plan"), and retail financing for Chrysler dealers and their
customers throughout North America. At December 31, 1993, Chrysler Credit
was providing financing to approximately 2,600 Chrysler dealers who
exclusively sell Chrysler products. Chrysler Credit also finances
approximately 1,400 dealers who sell non-Chrysler products (either
exclusively or together with Chrysler products). Chrysler Credit also
offers its floor plan dealers working capital loans, real estate and
equipment financing and financing plans for fleet buyers, including daily
rental car companies independent of, and affiliated with, Chrysler. The
automotive financing operations of Chrysler Credit and such other
subsidiaries are conducted through 100 branches in the United States,
Canada, Mexico and Puerto Rico.
During 1993, the Company financed or leased approximately 766,000
vehicles at retail in the United States, including approximately 516,000
new Chrysler passenger cars and light duty trucks representing 25 percent
of Chrysler's U.S. retail and fleet deliveries (representing 19 percent of
Chrysler's U.S. retail sales and 51 percent of Chrysler's U.S. fleet
sales). The Company also financed at wholesale approximately 1,510,000 new
Chrysler passenger cars and light duty trucks representing 75 percent of
Chrysler's U.S. factory shipments in 1993. Wholesale vehicle financing
accounted for 74 percent of the total automotive financing volume of the
Company in 1993 and represented 16 percent of gross automotive finance
receivables outstanding at December 31, 1993.
Nonautomotive Financing. The Company has downsized its nonautomotive
operations through sales and liquidations over the last several years.
During 1993, the Company realized $2.4 billion of aggregate cash proceeds
from the sale of substantially all of the consumer and inventory financing
businesses of Chrysler First Inc. ("Chrysler First") and the sale of certain
assets of Chrysler Capital Corporation ("Chrysler Capital").
Chrysler Capital manages commercial leases and loans to clients in
over 30 industries through 16 offices throughout the United States. At
December 31, 1993, Chrysler Capital managed $2.7 billion of commercial
finance receivables compared to $3.2 billion at December 31, 1992. In
addition, the Company managed a portfolio of secured small business loans
totaling $.6 billion at December 31, 1993.
RISK FACTORS
Prior to deciding to invest in the Debt Securities, potential
purchasers should carefully consider the following factors, together with
the information herein contained and incorporated herein by reference.
Liquidity and Capital Resources. The Company has significant
liquidity requirements. If cash provided by operations, borrowings under
bank credit lines, continued receivable sales and the placement of term
debt does not provide the necessary liquidity, the Company would be
required to restrict its financing of Chrysler products and dealers. A
significant reduction in such financing support would have a material
adverse effect on the Company and Chrysler. Additionally, an impairment of
the Company's ability to sell or securitize its receivables, a reduction
in Chrysler's automotive product sales, and a variety of other factors
could affect the Company's ability to repay its debt at maturity. See,
"Chrysler Financial Corporation Selected Consolidated Financial Data --
Liquidity and Capital Resources."
Relationship with Chrysler. Due to the significant portion of the
Company's business that relates to Chrysler and the Company's increasing
dependence upon Chrysler, lower levels of production and sales of Chrysler
automotive products would likely result in a reduction in the level of
finance operations of the Company. The Company's results of operations
during the next several years will depend significantly upon the success
of Chrysler's new products. The success of Chrysler's new products will
depend upon a number of factors, including the economy, competition,
consumer acceptance, Chrysler's ability to fund its new product
development and facility modernization programs, the effect of
governmental regulation and the strength of Chrysler's marketing and
dealer networks. See "Information Concerning Chrysler Corporation --
Results of Operations."
Chrysler Pension Obligations. Chrysler has a substantial unfunded
pension obligation. See "Information Concerning Chrysler Corporation --
Liquidity and Capital Resources." A failure to make the minimum
contribution required under the Employee Retirement Income Security Act of
1974, as amended ("ERISA"), without receipt of a statutory waiver, could
result in the creation of liens on all of the property of Chrysler and its
subsidiaries, including the Company and its subsidiaries, in order to
secure any shortfall from the required minimum contribution and could
result in the imposition of excise taxes and in the termination of its
plans by the Pension Benefit Guaranty Corporation, which would materially
adversely affect Chrysler's financial condition. However, Chrysler has
made contributions to its pension plans significantly in excess of ERISA
minimum requirements. As a result, Chrysler has no significant ERISA
minimum contribution requirements over the next four years. In the event
that termination liabilities with respect to the plans are incurred, such
liabilities would be the joint and several responsibilities of Chrysler
and certain of its affiliated entities, including the Company and its
subsidiaries. Under certain circumstances, the claims of the Pension
Benefit Guaranty Corporation could be legally entitled to priority in
right of payment over the rights of the holders of the Debt Securities. In
the judgment of Chrysler's management, the possibility is remote that
termination liabilities with respect to Chrysler's pension plans will be
incurred in the foreseeable future.
CHRYSLER FINANCIAL CORPORATION
SELECTED CONSOLIDATED FINANCIAL DATA
The following selected financial data of the Company for the five
years ended December 31, 1993 have been derived from the consolidated
financial statements of the Company. The consolidated financial statements
as of December 31, 1993 and 1992 and for each of the years in the
three-year period ended December 31, 1993 and the report of Deloitte &
Touche thereon are incorporated herein by reference. The following
selected consolidated financial data should be read in conjunction with
such consolidated finanicial statements, related notes and other financial
information incorporated herein by reference.
Year Ended December 31,
1993 1992 1991 1990 1989
(dollars in millions)
EARNINGS STATEMENT DATA:(1)
Total interest income........................... $ 1,418 $ 1,939 $ 2,598 $ 3,293 $ 3,730
Interest expense ............................... 791 1,022 1,446 2,051 2,515
Interest margin................................. 627 917 1,152 1,242 1,215
Other revenues.................................. 621 636 623 481 349
Operating expenses.............................. 463 595 614 566 574
Provision for credit losses..................... 216 309 421 339 297
Earnings before income taxes and cumulative
effect of changes in accounting principles..... 267 295 402 476 440
Net earnings(2)................................. 129 231 276 313 284
December 31,
1993 1992 1991 1990 1989
Balance Sheet Data:(1) (dollars in millions)
Finance receivables -- net...................... $ 8,659 $ 9,638 $15,015 $20,683 $27,336
Retained interests in sold receivables and other
related amounts -- net......................... 3,587 3,321 3,449 1,516 461
Cash and cash equivalents....................... 265 433 522 266 200
Marketable securities........................... 348 333 298 310 310
Assets held for sale............................ -- 2,393 -- -- --
Amounts due from affiliated companies........... -- -- 67 -- --
Repossessed collateral.......................... 269 192 182 93 120
Dealership properties leased -- net............. 423 454 469 464 438
Equipment leased to others -- net .............. 176 333 836 883 774
Other assets.................................... 524 451 442 487 451
Total assets................................ $14,251 $17,548 $21,280 $24,702 $30,090
Short-term notes (primarily commercial paper)... $ 2,772 $ 352 $ 339 $ 1,114 $10,061
Bank borrowings................................. -- 5,924 6,633 6,241 --
Senior term debt................................ 5,139 4,436 6,742 9,233 11,107
Subordinated term debt.......................... 77 585 949 1,686 2,434
Other debt...................................... 447 455 518 431 614
Accounts payable, accrued expenses and other ... 1,147 1,270 1,777 1,712 1,861
Amounts due to affiliated companies............. 24 35 -- 224 315
Deferred income taxes........................... 1,514 1,493 1,480 1,272 940
Total Liabilities........................... 11,120 14,550 18,438 21,913 27,332
Shareholder's investment:
Preferred..................................... -- -- 75 285 375
Common(3)..................................... 3,131 2,998 2,767 2,504 2,383
Total shareholder's investment.............. 3,131 2,998 2,842 2,789 2,758
Total liabilities and shareholder's
investment ................................ $14,251 $17,548 $21,280 $24,702 $30,090
<FN>
- ----------------
(1) Prior periods reclassified to conform to current classifications.
(2) Net earnings for 1993 included a $30 million after-tax charge from the
adoption of Statement of Financial Accounting Standards ("SFAS") No.
106, "Employers' Accounting for Postretirement Benefits Other Than
Pensions" and SFAS No. 112, "Employers' Accounting for Postemployment
Benefits," while 1992 net earnings included a $51 million favorable
after-tax adjustment from the adoption of SFAS No. 109, "Accounting
for Income Taxes" and an after-tax one-time $24 million charge for the
write-off of goodwill.
(3) The Company declared no cash dividends in respect of its common stock
during 1993, 1992 or 1991 and in each of the two years preceeding 1991
declared cash dividends of $150 million and $200 million,
respectively.
FINANCIAL CONDITION
The Company's financial condition and liquidity improved during 1993
as it regained full access to the investment grade debt markets. During
1993, funding provided by capital market activities and the downsizing of
nonautomotive operations through sales and liquidations, enabled the
Company to repay all amounts outstanding under its revolving credit
facilities and to provide financial support for automotive dealers and
retail purchasers of Chrysler's products.
The Company's portfolio of receivables managed, which includes
receivables owned and receivables serviced for others, totaled $28.3
billion at December 31, 1993, down from $30.1 billion and $33.7 billion at
December 31, 1992 and 1991, respectively. The decline in receivables
managed primarily reflects the downsizing of the Company's nonautomotive
operations.
Receivables serviced for others primarily represent sold receivables
which the Company services for a fee. Receivables serviced for others
totaled $19.4 billion at December 31, 1993, compared to $18.3 billion and
$18.4 billion at December 31, 1992 and 1991, respectively. The increase in
receivables serviced for others reflects higher levels of automotive sold
receivables, partially offset by the downsizing of nonautomotive
operations.
The Company's total allowance for credit losses, including
receivables sold subject to limited recourse provisions, totaled $494
million, $573 million and $557 million at December 31, 1993, 1992 and
1991, respectively. The total allowance for credit losses as a percentage
of related finance receivables outstanding was 1.78%, 1.94% and 1.74% at
December 31, 1993, 1992 and 1991, respectively. The decline in credit loss
reserve levels is a result of nonautomotive asset sales and an improvement
in automotive credit loss experience.
Total assets at December 31, 1993 declined to $14.3 billion from
$17.5 billion at December 31, 1992. Total debt outstanding at December 31,
1993 was $8.4 billion compared to $11.8 billion at December 31, 1992. The
Company's debt-to-equity ratio declined to 2.69 to 1 at December 31, 1993
compared to 3.92 to 1 at December 31, 1992. The decline in total assets,
total debt and the debt-to-equity ratio reflects the downsizing of the
Company and the use of nonautomotive asset sale proceeds to reduce the
Company's outstanding indebtedness.
RESULTS OF OPERATIONS
Earnings before income taxes and cumulative effect of changes in
accounting principles for 1993 totaled $267 million, compared to $295
million and $402 million in 1992 and 1991, respectively. The decline in
1993 earnings before income taxes and accounting changes from 1992
resulted largely from higher borrowing costs incurred under the Company's
revolving credit agreements. The decline in 1992 earnings before
accounting changes from the prior year was primarily due to lower levels
of earning assets and increased borrowing costs incurred under the bank
facilities, partially offset by lower provisions for credit losses.
The Company's net earnings after accounting changes were $129
million, $231 million and $276 million in 1993, 1992 and 1991,
respectively. Accounting changes in 1993 and 1992 negatively impact the
net earnings comparison by $81 million. Net earnings for the year ended
December 31, 1993 included charges totaling $30 million from the
implementation of SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions" and SFAS No. 112, "Employers' Accounting for
Postemployment Benefits". Net earnings for the year ended December 31,
1992 included a $51 million favorable adjustment from the adoption of SFAS
No. 109, "Accounting for Income Taxes".
The Company's provision for credit losses for 1993 totalled $216
million compared to $309 million and $421 million in 1992 and 1991,
respectively. The lower provision for credit losses reflects improved
automotive credit loss experience and the downsizing of nonautomotive
operations.
Net credit loss experience, including net losses on receivables sold
subject to limited recourse provisions, for the years ended December 31,
1993, 1992 and 1991 was as follows:
Net Credit Losses
1993 1992 1991
(in millions of dollars)
Automotive financing....................... $109 $163 $218
Nonautomotive financing.................... 88 147 141
Total.................................. $197 $310 $359
Net Credit Losses to Average
Gross Receivables Outstanding
1993 1992 1991
Automotive financing....................... .44% .68% .86%
Nonautomotive financing.................... 1.73% 1.50% 1.19%
Total.................................. .66% .92% .97%
LIQUIDITY AND CAPITAL RESOURCES
Liquidity improved during 1993 due to an improved market perception
of the Company's creditworthiness, proceeds from sales of nonautomotive
operations and the achievement of investment grade credit ratings. The
Company's improved access to the debt markets enabled it to issue $2.3
billion of term debt and increase the level of short-term notes
outstanding (primarily commercial paper) to $2.8 billion.
Receivable sales continued to be a significant source of funding
during 1993 as the Company realized $7.8 billion of net proceeds from the
sale of automotive retail receivables, compared to $5.8 billion of net
proceeds from the sale of automotive and nonautomotive retail receivables
for the year ended December 31, 1992. In addition, revolving wholesale
receivable sale arrangements provided funding which aggregated $4.6
billion and $4.3 billion at December 31, 1993 and 1992, respectively.
During 1993 the Company realized $2.4 billion in aggregate cash
proceeds from the sale of substantially all of the net assets of the
consumer and inventory financing businesses of Chrysler First and the sale
of certain assets of Chrysler Capital.
During the second quarter of 1994, the Company replaced its then
existing U.S. and Canadian revolving credit and receivable sale
agreements, which were originally scheduled to expire in 1995. The new
agreements provide for lower total commitments, reductions in borrowing
spreads and commitment fees and less restrictive financial covenants,
including the relaxation of dividend restrictions and the removal of
security interests in the Company's U.S. assets.
As of September 30, 1994, the Company's credit facilities consisted
of $4.6 billion of U.S. and $.6 billion of Canadian credit facilities
which expire in May 1998. As of September 30, 1994, the Company's
automotive receivable sale agreements consisted of a $1.5 billion U.S.
agreement (of which $.5 billion expires in May 1995, and $1.0 billion
expires in May 1998) and a $.2 billion Canadian agreement (of which $.1
billion expires in May 1995, and $.1 billion expires in May 1998). As of
September 30, 1994 no amounts were outstanding under the Company's
revolving credit or receivable sale agreements.
Receivable sales continued to be a significant source of funding in
the first nine months of 1994 as the Company realized $5.2 billion of net
proceeds from the sale of automotive retail receivables, compared to $5.7
billion of net proceeds in the same period of 1993. In addition, revolving
wholesale receivable sale arrangements during such period provided funding
which aggregated $3.6 billion and $4.1 billion at September 30, 1994 and
1993, respectively.
At September 30, 1994, the Company had contractual debt maturities
of $4.1 billion during the remainder of 1994 (including $3.1 billion of
short-term notes), $.6 billion in 1995, and $1.1 billion in 1996.
During the third quarter of 1994, the Company paid a $16 million
dividend on its common stock to Chrysler, reflecting the relaxation of
dividend restrictions under its new revolving credit facilities.
For additional information regarding the results of operations and
financial condition of the Company, see the Company's Annual Report on
Form 10-K for the year ended December 31, 1993 and the Company's Quarterly
Reports on Form 10-Q for the three months ended March 31, 1994, the six
months ended June 30, 1994 and the nine months ended September 30, 1994,
incorporated by reference into this Prospectus.
NEW ACCOUNTING STANDARDS
In May 1993, the Financial Accounting Standards Board ("FASB")
issued SFAS No. 114, "Accounting by Creditors for Impairment of a Loan,"
which amends SFAS No. 5, "Accounting for Contingencies," by requiring
creditors to evaluate the collectibility of both contractual interest and
principal of receivables when evaluating the need for a loss accrual. The
Company plans to adopt SFAS No. 114 on or before January 1, 1995. Adoption
of the standard is not expected to have a material impact upon the
Company's results of operations and financial position.
Effective January 1, 1994, the Company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities." This
accounting standard specifies the accounting and reporting requirements
for changes in the fair values of investments with readily determinable
fair values. The adjustment of available-for-sale securities to market
value at September 30, 1994 decreased Shareholder's Investment by $8
million.
INFORMATION CONCERNING CHRYSLER CORPORATION
The results of operations and balance sheet data set forth below for
Chrysler reflect the full consolidation of the accounts of all significant
majority-owned subsidiaries and entities over which Chrysler has a
controlling financial interest.
Year Ended December 31,
1993 1992 1991
Results of Operations Data (in millions of dollars)
Sales of manufactured products.............................. $40,831 $33,548 $25,575
Finance and insurance income................................ 1,429 1,953 2,587
Other income................................................ 1,340 1,396 1,208
Total Sales and Revenues.................................... 43,600 36,897 29,370
Total Costs and Expenses.................................... 39,762 35,963 30,180
Earnings (Loss) Before Income Taxes and Cumulative
Effect of Changes in Accounting Principles ................ 3,838 934 (810)
Provision (credit) for income taxes......................... 1,423 429 (272)
Earnings (Loss) Before Cumulative Effect of Changes in
Accounting Principles...................................... 2,415 505 (538)
Cumulative effect of changes in accounting principles....... (4,966) 218 (257)
Net Earnings (Loss)......................................... $(2,551) $ 723 $ (795)
Preferred stock dividends................................... 80 69 --
Net Earnings (Loss) on Common Stock......................... $(2,631) $ 654 $ (795)
December 31,
1993 1992 1991
Balance Sheet Data (in millions of dollars)
Cash, cash equivalents and marketable securities............ $ 5,095 $ 3,649 $ 3,035
Total assets................................................ 43,830 40,653 43,076
Total debt.................................................. 11,451 15,551 19,438
Shareholders' equity........................................ 6,836 7,538 6,109
RESULTS OF OPERATIONS
Chrysler reported earnings before income taxes and the cumulative
effect of changes in accounting principles of $3.8 billion in 1993,
compared with $934 million in 1992. The earnings in 1993 included a gain
on sales of automotive assets and investments of $265 million. Earnings in
1992 included a gain on the sale of an automotive investment of $142
million, a $110 million charge for reducing investments of Chrysler Canada
Ltd. and certain of its employee benefit plans in a real estate investment
concern to their estimated net realizable value, and a $101 million
restructuring charge related to the realignment of Chrysler's short term
vehicle rental subsidiaries. Excluding the effect of these items, Chrysler's
pre-tax earnings for 1993 and 1992 were $3.6 billion and $1.0 billion,
respectively.
The improvement in 1993 over 1992 was primarily the result of a
substantial increase in unit sales volume, pricing actions, including
significantly lower per unit sales incentives, and an improved mix of
higher-margin products, partially offset by increased labor and benefit
costs. Chrysler's worldwide factory car and truck sales increased 14
percent during 1993 to 2,475,738 units. U.S. and Canadian dealers' days
supply of vehicle inventory decreased to 63 days at December 31, 1993 from
72 days at December 31, 1992.
Including the provision for income taxes and the cumulative effect
of changes in accounting principles, Chrysler reported a net loss for 1993
of $2.6 billion, or $7.62 per common share, compared with net earnings of
$723 million, or $2.21 per common share, for 1992. The net loss for 1993
resulted from a charge of $4.68 billion, or $13.57 per common share, for
the cumulative effect of a change in accounting principle related to the
adoption of SFAS No. 106, "Employers' Accounting for Postretirement
Benefits Other Than Pensions." Also included in the 1993 results was a
charge of $283 million, or $0.82 per common share, for the cumulative
effect of a change in accounting principle relating to the adoption of
SFAS No. 112, "Employers' Accounting for Postemployment Benefits." Net
earnings for 1992 included a $218 million, or $0.74 per common share,
favorable cumulative effect of a change in accounting principle relating
to the adoption of SFAS No. 109, "Accounting for Income Taxes."
Chrysler's automotive operations, including product design and
development efforts, manufacturing operations and sales, are conducted
mainly in North America. Chrysler's principal domestic competitors in the
United States are General Motors Corporation and Ford Motor Company. In
addition, a number of Japanese automotive companies own and operate
manufacturing and/or assembly facilities in the United States and there
are a number of other foreign manufacturers that distribute automobiles
and light-duty trucks in the United States. Many of Chrysler's competitors
have larger worldwide sales volumes and greater financial resources, which
may place Chrysler at a competitive disadvantage in responding to
substantial changes in consumer preferences or governmental regulations
that require major additional capital expenditures. Adverse economic
conditions in North America may also be more readily absorbed by
Chrysler's larger and more diversified competitors.
Chrysler's long-term profitability depends upon its ability to
introduce and market its new products successfully. The success of
Chrysler's new products will depend on a number of factors, including the
economy, competition, consumer acceptance, Chrysler's ability to fund its
new product development and facility modernization programs, the effect of
governmental regulation and the strength of Chrysler's marketing and
dealer networks. As both Chrysler and its competitors plan to introduce
new products, Chrysler cannot predict the market shares its new products
will achieve. Moreover, Chrysler is substantially committed to the types
of vehicles contemplated by its product plans and would be adversely
affected by developments requiring a major shift in product design.
LIQUIDITY AND CAPITAL RESOURCES
Chrysler's combined cash, cash equivalents and marketable securities
totaled $7.1 billion at September 30, 1994 (including $507 million held by the
Company), an increase of $2.0 billion from December 31, 1993. The increase
in the first nine months of 1994 was the result of cash generated by
operating activities, partially offset by pension contributions and
capital expenditures. Chrysler's combined cash, cash equivalents and
marketable securities totaled $5.1 billion at December 31, 1993 (including
$613 million held by the Company), an increase of $1.4 billion from
December 31, 1992. The increase in 1993 was the result of cash generated
by operating activities, the issuance of 52 million shares of new common
stock and the sale of assets and investments, partially offset by debt
repayments, pension contributions and capital expenditures. During 1992,
Chrysler increased its consolidated cash, cash equivalents and marketable
securities by $614 million, as cash generated by operating activities, the
issuance of 1.7 million shares of convertible preferred stock and the sale
of automotive assets exceeded capital expenditures and debt repayments.
During 1992 and 1993, Chrysler took various actions to strengthen
its financial condition, improve liquidity and add to its equity base in
order to ensure its ability to carry out its new product development and
facility modernization programs without significant interruption. In the
second and third quarters of 1993, Chrysler sold its remaining 50.3
million shares of Mitsubishi Motors Corporation ("MMC") stock for net
proceeds of $329 million and sold the plastics operations of its Acustar
division for net proceeds of $132 million. In February 1993, Chrysler
issued 52 million shares of common stock for net proceeds of $1.95
billion. In 1992, Chrysler sold 43.6 million shares of MMC stock for net
proceeds of $215 million and issued 1.7 million shares of convertible
preferred stock for net proceeds of $836 million.
During the first quarter of 1994, Chrysler revised its near-term new
product development and productive asset acquisition plans to include
various actions intended to increase the capacity at several of its
facilities. Chrysler currently expects to spend approximately $21 billion
in the 1994 to 1998 period for new product development and the acquisition
of productive assets.
Chrysler's projected pension benefit obligation in excess of plan
assets was $2.2 billion at December 31, 1993. Chrysler contributed $1.9
billion to the pension fund in the first nine months of 1994. During the
second quarter of 1994, Chrysler announced an objective, subject to a
continuation of present general economic, industry and capital market
trends, to fully fund the remaining pension obligation by the end of 1994.
In order to achieve this objective, Chrysler estimates that contributions
during the fourth quarter of 1994 will not exceed $650 million.
At September 30, 1994, Chrysler (excluding the Company), had debt
maturities totaling $243 million through 1996. Chrysler believes that cash
from operations and its cash position will be sufficient to enable it to
meet its capital expenditure, pension, debt maturity and other funding
requirements.
FINANCING BY THE COMPANY
Chrysler's ability to market its products successfully depends
significantly on the availability of inventory financing for its dealers
and, to a lesser extent, the availability of financing for retail and
fleet purchasers of its products. The Company provided inventory financing
for approximately 75 percent of the vehicles Chrysler sold to dealers in
the United States in 1993. The Company also provided financing for
approximately 25 percent of Chrysler's U.S. retail and fleet deliveries in
1993 (representing 19 percent of Chrysler's U.S. retail sales and 51
percent of Chrysler's U.S. fleet sales).
RATIO OF EARNINGS TO FIXED CHARGES
The ratios of earnings to fixed charges of the Company Consolidated
and Chrysler Consolidated for the first nine months of 1994 and for each of
the last five years were as follows:
Nine Months
Ended Years Ended December 31,
September 30, 1994 1993 1992 1991 1990 1989
The Company Consolidated.......... 1.40X 1.33X 1.28X 1.27X 1.23X 1.17X
Chrysler Consolidated............. 5.37X 3.62X 1.48X 0.59X 1.03X 1.16X
The Company Consolidated. The ratios of earnings to fixed charges
have been computed by dividing earnings before taxes on income and fixed
charges by fixed charges. Fixed charges consist of interest, amortization
of debt discount and expense, and rentals. Rentals included in fixed
charges are the portion of total rent expense representative of the
interest factor (deemed to be one-third).
Chrysler Consolidated. For the purpose of computing the ratios of
earnings to fixed charges, earnings are determined by adding back fixed
charges to earnings (loss) from continuing operations (including equity in
net earnings of unconsolidated subsidiaries) before taxes on income and
excluding undistributed earnings from less than 50% owned affiliates.
Fixed charges consist of interest expense, credit line commitment fees and
the interest portion of rent expense. The year ended December 31, 1989 has
been restated to exclude the effects of discontinued operations. In 1991,
earnings were not sufficient to cover fixed charges. The coverage
deficiency was $897 million.
USE OF PROCEEDS
Unless otherwise provided in the applicable Prospectus Supplement,
the net proceeds to be received by the Company from the sale of the Debt
Securities and Warrants and the exercise of Warrants will be added to its
general corporate funds and may be used to repay long-term or short-term
borrowings and for other general corporate purposes. If the Company elects
at the time of the issuance of Debt Securities or Warrants to make
different or more specific use of proceeds other than as set forth herein,
such use will be described in the Prospectus Supplement.
DESCRIPTION OF DEBT SECURITIES
The following description of the terms of the Debt Securities set
forth certain general terms and provisions of the Debt Securities to which
any Prospectus Supplement may relate. The particular terms of the Debt
Securities offered by any Prospectus Supplement and the extent, if any, to
which such general provisions may apply to the Debt Securities so offered
will be described in the Prospectus Supplement relating to such Debt
Securities.
The Debt Securities are to be issued under an Indenture dated as of
February 15, 1988, as amended (the "Indenture"), between the Company and
Manufacturers Hanover Trust Company, which has been succeeded by United
States Trust Company of New York as successor Trustee (the "Trustee"). The
Indenture is incorporated by reference as an exhibit to the Registration
Statement. The following summary of certain provisions of the Indenture
does not purport to be complete and is qualified in its entirety by
reference to the provisions of the Indenture. Numerical references in
parentheses below are to sections of the Indenture. Wherever particular
sections or defined terms of the Indenture are referred to, it is intended
that such sections or defined terms shall be incorporated herein by
reference.
GENERAL
Debt Securities and Warrants offered by this Prospectus will be
limited to an aggregate initial public offering price of approximately
$7,576,975,850 or the equivalent thereof in one or more foreign currencies
or composite currencies. The Indenture provides that Debt Securities in an
unlimited amount may be issued thereunder from time to time in one or more
series. (Section 301)
The Securities will rank pari passu in right of payment with all
existing and future unsecured and unsubordinated indebtedness of the
Company.
Reference is hereby made to the Prospectus Supplement relating to
the particular series of Debt Securities offered thereby for the terms of
such Debt Securities, including, where applicable: (i) the designation,
aggregate principal amount, currency or currencies and denominations of
such Debt Securities; (ii) the price (expressed as a percentage of the
aggregate principal amount thereof) at which such Debt Securities will be
issued; (iii) the date or dates on which such Debt Securities will mature;
(iv) the currency or currencies in which such Debt Securities are being
sold and in which the principal of and any interest on such Debt
Securities will be payable, whether the holder of any such Debt Securities
may elect the currency in which payments thereon are to be made and, if
so, the manner of such election; (v) the rate or rates (which may be fixed
or variable) per annum at which such Debt Securities will bear interest;
(vi) the date from which such interest on such Debt Securities will
accrue, the dates on which such interest will be payable and the date on
which payment of such interest will commence; (vii) the dates on which and
the price or prices at which such Debt Securities will, pursuant to any
mandatory sinking fund provision, or may, pursuant to any optional
redemption or required repayment provisions, be redeemed or repaid and the
other terms and provisions of any such optional redemption or required
repayment; (viii) whether such Debt Securities are to be issuable as
Registered Securities, Bearer Securities or both and the terms upon which
any Bearer Securities of such series may be exchanged for Registered
Securities of such series; (ix) whether such Debt Securities are to be
issued in whole or in part in the form of one or more Global Securities
and, if so, the identity of the Depositary for such Global Security or
Securities; (x) any special provisions for the payment of additional
amounts with respect to such Debt Securities; (xi) if a temporary Global
Security is to be issued with respect to such series, whether any interest
thereon payable on an interest payment date prior to the issuance of a
permanent Global Security or definitive Bearer Securities will be credited
to the account of the persons entitled thereto on such interest payment
date; (xii) if a temporary Global Security is to be issued with respect to
such series, the terms upon which interests in such temporary Global
Security may be exchanged for interests in a permanent Global Security or
for definitive Debt Securities of the series and the terms upon which
interests in a permanent Global Security, if any, may be exchanged for
definitive Debt Securities of the series; (xiii) any additional
restrictive covenants included for the benefit of holders of such Debt
Securities; (xiv) additional Events of Default provided with respect to
such Debt Securities; and (xv) the terms of any Warrants offered together
with such Debt Securities.
The Debt Securities may be issuable as Registered Securities, Bearer
Securities or both. Debt Securities of a series may be issuable in whole
or in part in the form of one or more Global Securities, as described
below under "Global Securities". Unless the Prospectus Supplement relating
thereto specifies otherwise, Registered Securities denominated in U.S.
dollars will be issued only in denominations of $1,000 or any integral
multiple thereof and Bearer Securities denominated in U.S. dollars will be
issued only in the denomination of $5,000. See, however, "Limitations on
Issuance of Bearer Securities and Bearer Warrants" below. One or more
Global Securities may be issued in a denomination or aggregate
denominations equal to the aggregate principal amount of Outstanding Debt
Securities of the series to be represented by such Global Security or
Securities. The Prospectus Supplement relating to a series of Debt
Securities denominated in a foreign or composite currency will specify the
denomination thereof. No service charge will be made for any transfer or
exchange of Debt Securities, but the Company may require payment of a sum
sufficient to cover any tax or other governmental charge payable in
connection therewith. (Sections 302 and 305)
At the option of the Holder upon request confirmed in writing, and
subject to the terms of the applicable Indenture, Bearer Securities (with
all unmatured coupons, except as provided below) of any series will be
exchangeable into an equal aggregate principal amount of Registered
Securities (if the Debt Securities of such series are issuable as
Registered Securities) or Bearer Securities of the same series (with the
same interest rate and maturity date), but no Bearer Security will be
delivered in or to the United States, and Registered Securities of any
series (other than a Global Security, except as set forth below) will be
exchangeable into an equal aggregate principal amount of Registered
Securities of the same series (with the same interest rate and maturity
date) of different authorized denominations. If a Holder surrenders Bearer
Securities in exchange for Registered Securities between a Regular Record
Date or, in certain circumstances, a Special Record Date, and the relevant
interest payment date, such Holder will not be required to surrender the
coupon relating to such interest payment date. Registered Securities may
not be exchanged for Bearer Securities. (Section 305)
Debt Securities may be presented for exchange, and Registered
Securities (other than a Global Security) may be presented for transfer
(with the form of transfer endorsed thereon duly executed), at the office
of any transfer agent or at the office of the Security Registrar, without
service charge and upon payment of any taxes and other governmental
charges as described in the applicable Indenture. (Section 305) Bearer
Securities will be transferable by delivery.
Debt Securities may be issued under the Indenture as Original Issue
Discount Securities to be offered and sold at a discount below their
stated principal amount. Federal income tax consequences and other special
considerations applicable to any such Original Issue Discount Securities
will be described in the Prospectus Supplement relating thereto. "Original
Issue Discount Securities" means any Debt Securities that provide for an
amount less than the principal amount thereof to be due and payable upon a
declaration of acceleration of the maturity thereof upon the occurrence of
an Event of Default and the continuation thereof. (Section 101)
GLOBAL SECURITIES
The Debt Securities of a series may be issued in whole or in part in
the form of one or more Global Securities that will be deposited with, or
on behalf of, a depositary (the "Depositary") identified in the Prospectus
Supplement relating to such series. Global Securities may be issued in
either registered or bearer form and in either temporary or permanent
form. Unless and until it is exchanged in whole or in part for Debt
Securities in definitive form, a Global Security may not be transferred
except as a whole by the Depositary for such Global Security to a nominee
of such Depositary or by a nominee of such Depositary to such Depositary
or another nominee of such Depositary or by such Depositary or any such
nominee to a successor of such Depositary or a nominee of such successor.
(Sections 303 and 305)
The specific terms of the depositary arrangement with respect to any
Debt Securities of a series will be described in the Prospectus Supplement
relating to such series. The Company anticipates that the following
provisions will apply to all depositary arrangements.
Upon the issuance of a Global Security, the Depositary for such
Global Security will credit, on its book-entry registration and transfer
system, the respective principal amounts of the Debt Securities
represented by such Global Security to the accounts of institutions that
have accounts with such Depositary ("participants"). The accounts to be
credited shall be designated by the underwriters of such Debt Securities
or by the Company, if such Debt Securities are offered and sold directly
by the Company. Ownership of beneficial interests in a Global Security
will be limited to participants or persons that may hold interests through
participants. Ownership of beneficial interests in such Global Security
will be shown on, and the transfer of that ownership will be effected only
through, records maintained by participants or persons that hold through
participants. The laws of some states require that certain purchasers of
securities take physical delivery of such securities in definitive form.
Such limits and such laws may impair the ability to transfer beneficial
interests in a Global Security.
So long as the Depositary for a Global Security, or its nominee, is
the owner of such Global Security, such Depositary or such nominee, as the
case may be, will be considered the sole owner or holder of the Debt
Securities represented by such Global Security for all purposes under the
Indenture governing such Debt Securities. Except as set forth below,
owners of beneficial interests in a Global Security will not be entitled
to have Debt Securities of the series represented by such Global Security
registered in their names, will not receive or be entitled to receive
physical delivery of Debt Securities of such series in definitive form and
will not be considered the owners or holders thereof under the Indenture.
Subject to the restrictions discussed under "Limitations on Issuance
of Bearer Securities and Bearer Warrants" below, principal, premium, if
any, and interest payments on Debt Securities registered in the name of or
held by a Depositary or its nominee will be made to the Depositary or its
nominee, as the case may be, as the registered owner or the holder of the
Global Security representing such Debt Securities. None of the Company,
the Trustee for such Debt Securities, any Paying Agent or the Security
Registrar for such Debt Securities will have any responsibility or
liability for any aspect of the records relating to or payments made on
account of beneficial ownership interests in a Global Security for such
Debt Securities or for maintaining, supervising or reviewing any records
relating to such beneficial ownership interests.
The Company expects that the Depositary for Debt Securities of a
series, upon receipt of any payment of principal, premium or interest in
respect of a permanent Global Security, will credit immediately
participants' accounts with payments in amounts proportionate to their
respective beneficial interests in the principal amount of such Global
Security as shown on the records of such Depositary. The Company also
expects that payments by participants to owners of beneficial interests in
such Global Security held through such participants will be governed by
standing instructions and customary practices, as is now the case with
securities held for the accounts of customers in bearer form or registered
in "street name", and will be the responsibility of such participants.
Receipt by owners of beneficial interests in a temporary Global Security
of payments in respect of such temporary Global Security will be subject
to the restrictions discussed under "Limitations on Issuance of Bearer
Securities and Bearer Warrants" below.
If a Depositary for Debt Securities of a series is at any time
unwilling or unable to continue as depositary and a successor depositary
is not appointed by the Company within ninety days, the Company will issue
Debt Securities of such series in definitive form in exchange for all of
the Global Securities representing the Debt Securities of such series. In
addition, the Company may at any time and in its sole discretion determine
not to have any Debt Securities of a series represented by one or more
Global Securities and, in such event, will issue Debt Securities of such
series in definitive form in exchange for all of the Global Securities
representing such Debt Securities. Further, if the Company so specifies
with respect to the Debt Securities of a series, an owner of a beneficial
interest in a Global Security representing Debt Securities of such series
may, on terms acceptable to the Company and the Depositary for such Global
Security, receive Debt Securities of such series in definitive form. In
any such instance, an owner of a beneficial interest in a Global Security
will be entitled to physical delivery in definitive form of Debt
Securities of the series represented by such Global Security equal in
principal amount to such beneficial interest and to have such Debt
Securities registered in its name (if the Debt Securities of such series
are issuable as Registered Securities). Debt Securities of such series so
issued in definitive form will be issued (a) as Registered Securities in
denominations, unless otherwise specified by the Company, of $1,000 and
integral multiples thereof if the Debt Securities of such series are
issuable as Registered Securities, (b) as Bearer Securities in the
denomination, unless otherwise specified by the Company, of $5,000 if the
Debt Securities of such series are issuable as Bearer Securities or (c) as
either Registered or Bearer Securities, if the Debt Securities of such
series are issuable in either form. (Section 305) See, however,
"Limitations on Issuance of Bearer Securities and Bearer Warrants" below
for a description of certain restrictions on the issuance of a Bearer
Security in definitive form in exchange for an interest in a Global
Security.
PAYMENT AND PAYING AGENTS
Payment of principal of and premium, if any, and interest on Bearer
Securities will be payable in the currency designated in the Prospectus
Supplement, subject to any applicable laws and regulations, at such paying
agencies outside the United States as the Company may appoint from time to
time. Any such payment may be made by a check in the designated currency.
No payment with respect to any Bearer Securities will be made at the
Corporate Trust Office of the Trustee or any other paying agency
maintained by the Company in the United States nor will any such payment
be made by transfer to an account, or by mail to an address, in the United
States. Notwithstanding the foregoing, payments of principal of and
premium, if any, and interest on Bearer Securities will be made in U.S.
dollars at the Corporate Trust Office of the Trustee in The City of New
York if payment of the full amount thereof at all paying agencies outside
the United States is illegal or effectively precluded by exchange controls
or other similar restrictions. (Section 1002)
Payment of principal of and premium, if any, on Registered
Securities will be made in the designated currency against surrender of
such Registered Securities at the Corporate Trust Office of the Paying
Agent in The City of New York. Unless otherwise indicated in the
Prospectus Supplement, payment of any installment of interest on
Registered Securities will be made to the person in whose name such Debt
Security is registered at the close of business on the regular record date
for such interest. Unless otherwise indicated in the Prospectus
Supplement, payments of such interest will be made at the Corporate Trust
Office of the Paying Agent in The City of New York, or by a check in the
designated currency mailed to each Holder at such Holder's registered
address. (Sections 307 and 1001)
The paying agents outside the United States initially appointed by
the Company for a series of Debt Securities will be named in the
Prospectus Supplement. The Company may terminate the appointment of any of
the paying agents from time to time, except that the Company will maintain
at least one paying agent in The City of New York for payments with
respect to Registered Securities and at least one paying agent in a city
in Europe so long as any Bearer Securities are outstanding where Bearer
Securities may be presented for payment and may be surrendered for
exchange, provided that so long as any series of Debt Securities is listed
on The International Stock Exchange of the United Kingdom and the Republic
of Ireland or the Luxembourg Stock Exchange or any other stock exchange
located outside the United States and such stock exchange shall so
require, the Company will maintain a paying agent in London or Luxembourg
or any other required city located outside the United States, as the case
may be, for such series of Debt Securities. (Section 1002)
All moneys paid by the Company to a paying agent for the payment of
principal of or premium, if any, or interest on any Debt Security that
remains unclaimed at the end of two years after such principal, premium or
interest shall have become due and payable may be repaid to the Company
and the Holder of such Debt Security or any coupon appertaining thereto
will thereafter look only to the Company for payment thereof.
(Section 1003)
COVENANTS
The Indenture imposes the following restrictive covenants on the
Company.
LIMITATION ON LIENS. The Company will not subject its assets or
assets of a Restricted Subsidiary to liens without securing the Debt
Securities equally and ratably with other indebtedness for borrowed money
so secured except for (1) liens securing exports to or marketing of goods
in foreign countries other than Canada, (2) liens on receivables payable
in foreign currencies to secure borrowings in foreign countries other than
Canada, (3) deposits in connection with public obligations or legal
proceedings, (4) liens securing intercompany indebtedness, (5) purchase
money mortgages on fixed assets hereafter acquired by the Company or any
of its Restricted Subsidiaries for use in the Finance Business or the
Finance-Related Insurance Business, liens on such property at the time of
its acquisition or liens on fixed assets used in the Finance Business or
the Finance-Related Insurance Business existing when a company becomes a
Subsidiary, and (6) renewals of the foregoing. (Section 1004) The term
"Restricted Subsidiary" means any Subsidiary of the Company engaged in the
Finance Business or in the Finance-Related Insurance Business other than
Subsidiaries that are organized or conduct a major portion of their
business outside the United States, Puerto Rico or Canada. The term
"Subsidiary" means a corporation a majority of the outstanding voting
stock of which is owned, directly or indirectly, by the Company.
(Section 101)
LIMITATION ON DIVIDENDS. Cash dividends on or acquisitions for
value of capital stock of the Company subsequent to December 31, 1984 are
limited to the sum of (i) consolidated net income of the Company and its
consolidated Subsidiaries calculated in accordance with generally accepted
accounting principles and (ii) net proceeds from cash sales of or cash
contributions to capital stock, subsequent to December 31, 1984.
Substantially concurrent acquisitions of capital stock out of the net
proceeds of sales of capital stock are excluded. (Section 1005)
RESTRICTED SUBSIDIARY STOCK AND DEBT. The Company will not, and
will not permit any Subsidiary to, sell or otherwise dispose of any shares
of stock or indebtedness for borrowed money of any Restricted Subsidiary
except to the Company or to a Restricted Subsidiary unless simultaneously
therewith all shares of stock and such indebtedness of such Restricted
Subsidiary at the time owned by the Company and all Subsidiaries are sold
or transferred. The Company will not permit any Restricted Subsidiary to
issue, sell or dispose of, except to the Company or to a Restricted
Subsidiary, (i) any preferred stock, except to any holders of the stock of
such Restricted Subsidiary in the exercise of a pre-emptive right to
subscribe to such preferred stock, or (ii) any other class of stock except
on the condition that the proportionate amount of shares of stock of such
class and of the total number of shares of stock of such Restricted
Subsidiary held by persons other than the Company and its Restricted
Subsidiaries shall not be increased and except for directors' qualifying
shares. (Sections 1007 and 1008)
MODIFICATION OF THE INDENTURES
The Indenture permits the Company and the Trustee, with the consent
of the holders of not less than 66 2/3% in principal amount of the Debt
Securities at the time outstanding thereunder and affected thereby, to
execute a supplemental indenture modifying the Indenture or the rights of
the holders of such Debt Securities and any related coupons, provided that
no such modification shall, without the consent of the holder of each Debt
Security affected thereby, (i) change the maturity of any Debt Security or
coupon, or reduce the principal amount thereof, or reduce the rate or
change the time of payment of interest thereon, or change any Place of
Payment or change the coin or currency in which a Debt Security or coupon
is payable or affect the right of any holder to institute suit for the
enforcement of payment in accordance with the foregoing, or (ii) reduce
the aforesaid percentage of Debt Securities, the consent of the holders of
which is required for any such modification. (Section 902)
The Indenture contains provisions for convening meetings of the
Holders of Debt Securities of a series if Debt Securities of that series
are issuable in whole or in part as Bearer Securities. (Section 1401) A
meeting may be called at any time by the Trustee, or upon the request of
the Company or the Holders of at least 10% in principal amount of the
outstanding Debt Securities of such series, in any such case upon notice
given in accordance with the Indenture. (Section 1402) The quorum at any
meeting called to adopt a resolution, and at any reconvened meeting, will
be persons holding or representing a majority in principal amount of the
outstanding Debt Securities of a series; provided, however, that if any
action is to be taken at such meeting with respect to a consent or waiver
which may be given by the Holders of not less than 66 2/3% in principal
amount of the outstanding Debt Securities of a series, the persons holding
or representing 66 2/3% in principal amount of the outstanding Debt
Securities of such series will constitute a quorum. (Section 1404) Except
as limited by the proviso in the preceding paragraph, any resolution
presented at a meeting or adjourned meeting at which a quorum is present
may be adopted by the affirmative vote of the Holders of a majority in
principal amount of the outstanding Debt Securities of that series;
provided, however, that, except as limited by the proviso in the preceding
paragraph, any resolution with respect to any consent or waiver that may
be given by the Holders of not less than 66 2/3% in principal amount of
the outstanding Debt Securities of a series may be adopted at a meeting or
an adjourned meeting at which a quorum is present only by the affirmative
vote of 66 2/3% in principal amount of the outstanding Debt Securities of
that series; and provided further that, except as limited by the proviso
in the preceding paragraph, any resolution with respect to any demand,
consent, waiver or other action that may be made, given or taken by the
Holders of a specified percentage, which is less than a majority, in
principal amount of outstanding Debt Securities of a series may be adopted
at a meeting or adjourned meeting at which a quorum is present by the
affirmative vote of the Holders of such specified percentage in principal
amount of the outstanding Debt Securities of that series.
Any resolution passed or decision taken at any meeting of Holders of
Debt Securities of any series duly held in accordance with the Indenture
will be binding on all Holders of Debt Securities of that series and the
related coupons.
EVENTS OF DEFAULT
The Indenture provides that the following shall constitute Events of
Default with respect to any series of Debt Securities thereunder: (i)
default in payment of principal of or premium, if any, on any Debt
Security of such series when due; (ii) default for 30 days in payment of
interest on any Debt Security of such series when due; (iii) default in
the deposit of any sinking fund payment on any Debt Security of such
series when due; (iv) default in performance of any other covenant in such
Indenture, continued for 30 days after written notice thereof by the
Trustee thereunder or the holders of 25% in principal amount of the Debt
Securities of such series at the time outstanding; (v) default resulting
in acceleration of maturity of any other indebtedness of the Company or
any Restricted Subsidiary provided that such acceleration has not been
rescinded or annulled within 10 days of written notice; and (vi) certain
events of bankruptcy, insolvency or reorganization. (Section 501) The
Company is required to file with each Trustee annually an Officers'
Certificate as to the absence of certain defaults under the terms of the
Indenture. (Section 1010)
The Indenture provides that if an Event of Default specified therein
shall occur and be continuing, either the Trustee or the holders of 25% in
principal amount of the Debt Securities of such series then outstanding
may declare the principal of all such Debt Securities (or in the case of
Original Issue Discount Securities, such portion of the principal amount
thereof as may be specified in the terms thereof) to be due and payable.
(Section 502) In certain cases, the holders of a majority in principal
amount of the outstanding Debt Securities of any series may on behalf of
the holders of all such Debt Securities and any related coupons waive any
past default or event of default except a default not theretofore cured in
payment of the principal of or premium, if any, or interest on any of the
Debt Securities of such series and any related coupons.
(Sections 502 and 513)
The Indenture contains a provision entitling the Trustee, subject to
the duty of such Trustee during default to act with the required standard
of care, to be indemnified by the holders of the Debt Securities of any
series or any related coupons before proceeding to exercise any right or
power under the Indenture with respect to such series at the request of
such holders. (Section 603) The Indenture provides that no holder of any
Debt Securities of any series or any related coupons may institute any
proceeding, judicial or otherwise, to enforce the Indenture except in the
case of failure of the Trustee, for 60 days, to act after it is given
notice of default, a request to enforce the Indenture by the holders of
not less than 25% in aggregate principal amount of the then outstanding
Debt Securities of such series and an offer of reasonable indemnity to
such Trustee. (Section 507) This provision will not prevent any holder of
Debt Securities or any related coupons from enforcing payment of the
principal thereof and premium, if any, and interest thereon at the
respective due dates thereof. (Section 508) The holders of a majority in
aggregate principal amount of the Debt Securities of any series then
outstanding may direct the time, method and place of conducting any
proceedings for any remedy available to the Trustee or exercising any
trust or power conferred on it with respect to the Debt Securities of such
series. However, the Trustee may refuse to follow any direction that
conflicts with law or the Indenture or which would be unjustly prejudicial
to holders not joining therein. (Section 512)
The Indenture provides that the Trustee thereunder will, within 90
days after the occurrence of a default with respect to any series of Debt
Securities thereunder known to it, give to the holders of the Debt
Securities of such series notice of such default if not cured or waived;
but, except in the case of a default in the payment of principal of (or
premium, if any), or interest on, any Debt Securities, the Trustee shall
be protected in withholding such notice if it determines in good faith
that the withholding of such notice is in the interests of the holders of
such Debt Securities. (Section 602)
DEFEASANCE
The Company may terminate certain of its obligations under the
Indenture with respect to Debt Securities of any series, including its
obligations to comply with the covenants described under the heading
"Restrictive Covenants" above, with respect to the Debt Securities of such
series, on the terms and subject to the conditions contained in the
Indenture, by depositing in trust with the Trustee money or Government
Obligations sufficient to pay the principal of and interest on the Debt
Securities of such series to maturity. Such deposit and termination is
conditioned upon the Company's delivery of (a) an opinion of nationally
recognized independent counsel that the holders of the Debt Securities of
such series will have no federal income tax consequences as a result of
such deposit and termination, (b) an officer's certificate and (c) if the
Debt Securities of such series are then listed on the New York Stock
Exchange, an opinion of counsel that the Debt Securities of such series
will not be delisted as a result of the exercise of this option. Such
termination will not relieve the Company of its obligation to pay when due
the principal of or interest on the Debt Securities of such series if the
Debt Securities of such series are not paid from the money or Government
Obligations held by the Trustee for the payment thereof. (Section 1301)
CONCERNING THE TRUSTEE
The Trustee is also trustee under indentures dated as of June 15,
1984 and September 15, 1986 between it and the Company.
DESCRIPTION OF WARRANTS
The following description of the terms of the Warrants sets forth
certain general terms and provisions of the Warrants to which any
Prospectus Supplement may relate. The particular terms of the Warrants
offered by any Prospectus Supplement and the extent, if any, to which such
general provisions may apply to the Warrants so offered will be described
in the Prospectus Supplement relating to such Warrants.
Warrants may be offered independently or together with any series of
Debt Securities offered by a Prospectus Supplement and may be attached to
or separate from such Debt Securities. Each series of Warrants will be
issued under a separate warrant agreement ("Warrant Agreement") to be
entered into between the Company and a bank or trust company, as Warrant
Agent (the "Warrant Agent"), all as set forth in the Prospectus Supplement
relating to such series of Warrants. The Warrant Agent will act solely as
the agent of the Company in connection with the certificates for the
Warrants (the "Warrant Certificates") of such series and will not assume
any obligation or relationship of agency or trust for or with any holders
of Warrant Certificates or beneficial owners of Warrants. Copies of the
forms of Warrant Agreements, including the forms of Warrant Certificates,
are filed as an exhibit to the Registration Statement to which this
Prospectus pertains. The following summaries of certain provisions of the
forms of Warrant Agreements and Warrant Certificates do not purport to be
complete and are subject to, and are qualified in their entirety by
reference to, all the provisions of the Warrant Agreements and the Warrant
Certificates. Numerical references in parentheses below are to sections of
the Warrant Agreements. Wherever particular sections or defined terms of
the Warrant Agreement are referred to, it is intended that such sections
or defined items shall be incorporated herein by reference.
GENERAL
Reference is hereby made to the Prospectus Supplement relating to
the particular series of Warrants, if any, offered thereby for the terms
of such Warrants, including, where applicable: (i) the offering price;
(ii) the currency or currencies in which such Warrants are being offered;
(iii) the designation, aggregate principal amount, currency or currencies,
denominations and terms of the series of Debt Securities purchasable upon
exercise of such Warrants; (iv) the designation and terms of the series of
Debt Securities with which such Warrants are being offered and the number
of such Warrants being offered with each such Debt Security; (v) the date
on and after which such Warrants and the related series of Debt Securities
will be transferable separately; (vi) the principal amount of the series
of Debt Securities purchasable upon exercise of each such Warrant and the
price at which and currency or currencies in which such principal amount
of Debt Securities of such series may be purchased upon such exercise;
(vii) the date on which the right to exercise such Warrants shall commence
and the date (the "Expiration Date") on which such right shall expire;
(viii) whether such Warrants are to be issuable as Bearer Warrants and the
terms upon which any Bearer Warrants of such series may be exchanged for
Registered Warrants of such series; (ix) federal income tax consequences;
and (x) any other terms of such Warrants.
Warrant Certificates of each series will be issuable as Registered
Warrants and may be issuable as Bearer Warrants. At the option of the
holder upon request confirmed in writing, and subject to the terms of the
relevant Warrant Agreement, Bearer Warrants of any series will be
exchangeable into Registered Warrants or Bearer Warrants of the same
series representing in the aggregate the number of Warrants surrendered
for exchange, and Registered Warrants of any series will be exchangeable
into Registered Warrants of the same series representing in the aggregate
the number of Warrants surrendered for exchange. Warrant Certificates may
be presented for exchange, and Registered Warrants may be presented for
transfer (with the form of transfer endorsed thereon duly executed), at
the corporate trust office of the Warrant Agent for such series of
Warrants (or any other office indicated in the Prospectus Supplement
relating to such series of Warrants) without service charge and upon
payment of any taxes and other governmental charges as described in the
relevant Warrant Agreement. Such transfer or exchange will be effected
when the Warrant Agent for such series of Warrants is satisfied with the
documents of title and identity of the person making the request. Bearer
Warrants will be transferable by delivery. (Section 4.01) Prior to the
exercise of their Warrants, holders of Warrants will not have any of the
rights of holders of the series of Debt Securities purchasable upon such
exercise, including the right to receive payments of principal of,
premium, if any, or interest, if any, on the series of Debt Securities
purchasable upon such exercise, or to enforce any of the covenants in the
Indenture. (Section 3.01)
EXERCISE OF WARRANTS
Each Warrant will entitle the holder thereof to purchase such
principal amount of the related series of Debt Securities at such exercise
price as shall in each case be set forth in, or calculable as set forth
in, the Prospectus Supplement relating to such Warrant. Warrants of a
series may be exercised at the corporate trust office of the Warrant Agent
for such series of Warrants (or any other office indicated in the
Prospectus Supplement relating to such series of Warrants) at any time
prior to 5:00 P.M., New York City time, on the Expiration Date set forth
in the Prospectus Supplement relating to such series of Warrants. After
the close of business on the Expiration Date relating to such series of
Warrants (or such later date to which such Expiration Date may be extended
by the Company), unexercised Warrants of such series will become void.
(Sections 2.02 and 2.03)
Warrants of a series may be exercised by delivery to the appropriate
Warrant Agent of payment, as provided in the Prospectus Supplement
relating to such series of Warrants, of the amount required to purchase
the principal amount of the series of Debt Securities purchasable upon
such exercise, together with certain information as set forth on the
reverse side of the Warrant Certificate evidencing such Warrants and, in
the case of Bearer Warrants, compliance with the procedures specified in
the applicable Prospectus Supplement. Such Warrants will be deemed to have
been exercised upon receipt of the exercise price, subject to the receipt
within five business days of such Warrant Certificate. Upon receipt of
such payment and such Warrant Certificate, properly completed and duly
executed, at the corporate trust office of the appropriate Warrant Agent
(or any other office indicated in the Prospectus Supplement relating to
such series of Warrants), the Company will, as soon as practicable, issue
and deliver the principal amount of the series of Debt Securities
purchasable upon such exercise. Registered Securities will be issued and
delivered upon exercise of Registered Warrants. At the option of the
holder of any Bearer Warrants, Registered Securities or Bearer Securities
will be issued and delivered upon exercise of such Bearer Warrants. If
fewer than all of the Warrants represented by a Registered Warrant are
exercised, a new Registered Warrant will be issued and delivered for the
remaining amount of Warrants. If fewer than all the Warrants represented
by a Bearer Warrant are exercised, at the option of the holder thereof, a
new Registered Warrant or Bearer Warrant will be issued and delivered for
the remaining amount of Warrants. (Section 2.03)
LIMITATIONS ON ISSUANCE OF BEARER SECURITIES AND BEARER WARRANTS
In compliance with United Stated federal tax laws and regulations
regarding the distribution of debt securities in bearer form, Bearer
Securities and Bearer Warrants may not, in connection with their original
issuance, be offered, sold, resold or delivered in the United States or to
United States persons (as defined below) other than to offices located
outside the United States of certain United States financial institutions
that agree in writing to comply with the requirements of Section
165(j)(3)(A), (B) or (C) of the Internal Revenue Code of 1986 (the "Code")
and the regulations thereunder, and any underwriters, agents and dealers
participating in the offering of Bearer Securities or Bearer Warrants will
agree that they will not offer any Bearer Securities or Bearer Warrants
for sale or resale in the United States or to United States persons (other
than the financial institutions described above) or deliver Bearer
Securities or Bearer Warrants within the United States. In addition, any
such underwriters, agents and dealers will agree to send confirmations to
each purchaser of a Bearer Security or Bearer Warrant confirming that such
purchaser represents that it is not a United States person or is a
financial institution described above and, if such person is a dealer,
that it will send similar confirmations to purchasers from it. Bearer
Securities will bear a legend substantially to the following effect: "Any
United States person who holds this obligation will be subject to
limitations under the United States income tax laws, including the
limitations provided in Sections 165(j) and 1287(a) of the Internal
Revenue Code."
Generally, for United States federal income tax purposes, any United
States person who holds a Bearer Security will not be allowed to deduct
any loss sustained on the sale, exchange, redemption or other disposition
of such Bearer Security and will be taxed at ordinary income rates on any
gain (which might otherwise be characterized as capital gain) recognized
on such sale, exchange, redemption or disposition.
As used herein, "United States" mean the United States of America
(including the States and the District of Columbia), its territories, its
possessions and other areas subject to its jurisdiction, and "United
States person" means an individual who is a citizen or resident of the
United States, a corporation, partnership or other entity created or
organized in or under the laws of the United States or any political
subdivision thereof, or any estate or trust the income of which is subject
to United States federal income taxation regardless of its source.
Pending the availability of a permanent Global Security or
definitive Bearer Securities, as the case may be, Debt Securities that are
issuable as Bearer Securities may initially be represented by a single
temporary Global Security, with or without interest coupons, each to be
deposited with a depositary in London for Morgan Guaranty Trust Company of
New York, Brussels Office, as operator of the Euroclear System
("Euroclear") and Centrale de Livraisons de Valeurs Mobilieres, S.A.
("Cedel S.A.") for credit to the designated accounts against
certifications to the effect described below. Following the availability
of a permanent Global Security or definitive forms of Bearer Securities
and subject to any further limitations described in the applicable
Prospectus Supplement, the temporary Global Security will be exchangeable
for a permanent Global Security or for definitive Bearer Securities,
respectively, only upon certification that an interest in such permanent
Global Security or such definitive Bearer Securities is not being acquired
by or on behalf of a United States person or, if a beneficial interest in
such a Bearer Security is being acquired by or on behalf of a United
States person, that such United States person is a financial institution
described above; provided, however, that no definitive Bearer Security
will be issued if the Company has reason to know that such certificate is
false. No definitive Bearer Security will be delivered in or to the United
States. If so specified in the applicable Prospectus Supplement, interest
in respect of any portion of the temporary Global Security payable in
respect of an Interest Payment Date prior to the issuance of a permanent
Global Security or definitive Bearer Securities of any series will be paid
to each of Euroclear and Cedel S.A. with respect to the portion of the
temporary Global Security held for its account. Each of Euroclear and
Cedel S.A. will undertake in such circumstances to credit such interest
received by it in respect of the temporary Global Security to the
respective accounts for which it holds the temporary Global Security only
upon receipt in each case of (i) certification that as of the relevant
interest payment date the portion of the temporary Global Security on
which such interest is to be so credited is not beneficially owned by a
United States person or any person who has purchased its interest in the
temporary Global Security for resale to any United States person or (ii)
if a beneficial interest in the portion of the temporary Global Security
on which such interest is to be so credited is beneficially owned by a
United States person or any person who has purchased its interest in the
temporary Global Security for resale to any United States person,
certification that such United States person is a financial institution
described above.
Bearer Warrants will be issued only on receipt of a certification
that the Bearer Warrant in question is not being acquired by or on behalf
of a United States person or, if a beneficial interest in such Bearer
Warrant is being acquired by or on behalf of a United States person, that
such United States person is a financial institution described above.
PLAN OF DISTRIBUTION
The Company may offer and sell Debt Securities and Warrants,
separately or together, to or through underwriters, acting as principals
for their own accounts and/or as agents, and also may offer and sell Debt
Securities and Warrants, separately or together, directly to dealers or
other purchasers. Any such Debt Securities and Warrants may be offered and
sold upon their original issuance or, if so indicated in the Prospectus
Supplement, in connection with a remarketing upon their purchase by or on
behalf of the Company, whether in accordance with a redemption or
repayment pursuant to their terms, in the open market or otherwise. Any
underwriter and/or agent will be identified and the terms of its agreement
with the Company and its compensation will be described in the Prospectus
Supplement. Only underwriters named in the Prospectus Supplement are
deemed to be underwriters in connection with the Debt Securities or
Warrants offered thereby.
Debt Securities and Warrants, separately or together, also may be
offered and sold, if so indicated in the Prospectus Supplement, in
connection with a remarketing upon their purchase, in accordance with a
redemption or repayment pursuant to their terms, by one or more firms
("remarketing firms") acting as principals for their own accounts or as
agents for the Company. Any remarketing firm will be identified and the
terms of its agreement, if any, with the Company and its compensation will
be described in the Prospectus Supplement. Remarketing firms may be deemed
to be underwriters in connection with the Debt Securities and Warrants
remarketed thereby.
The distribution of the Debt Securities and Warrants may be effected
from time to time in one or more transactions at a fixed price or prices,
which may be changed, or at market prices prevailing at the time of sale,
at prices related to such prevailing market prices or at negotiated
prices.
In connection with the sale of Debt Securities and Warrants, dealers
may receive compensation from the Company or from purchasers of Debt
Securities or Warrants for whom they may act as agents, in the form of
discounts, concessions or commissions. The dealers that participate in the
distribution of Debt Securities or Warrants may be deemed to be
underwriters and any discounts or commissions received by them and any
profit on the resale of Debt Securities or Warrants by them may be deemed
to be underwriting discounts and commissions under the Act. Any such
compensation will be described in the Prospectus Supplement.
Under agreements that may be entered into with the Company,
underwriters, dealers, agents and remarketing firms may be entitled to
indemnification by the Company against certain liabilities, including
liabilities under the Act. Underwriters, dealers, agents and remarketing
firms may be customers of, engage in transactions with, or perform
services for the Company in the ordinary course of business.
If so indicated in the Prospectus Supplement, the Company will
authorize dealers or other persons acting as the Company's agents to
solicit offers by certain institutions to purchase Debt Securities or
Warrants from the Company pursuant to contracts providing for payment and
delivery on a future date. Institutions with which such contracts may be
made include commercial and savings banks, insurance companies, pension
funds, investment companies, educational and charitable institutions and
others, but in all cases such institutions must be approved by the
Company. The obligations of any purchaser under any such contract will not
be subject to any conditions except that (i) the purchase of the Debt
Securities or Warrants shall not at the time of delivery be prohibited
under the laws of the jurisdiction to which such purchaser is subject, and
(ii) if the series of Debt Securities or Warrants being sold to such
institutions are also being sold to underwriters, the Company shall have
sold to such underwriters the Debt Securities or Warrants not sold for
delayed delivery. The dealers and such other persons will not have any
responsibility in respect of the validity of performance of such
contracts.
Each underwriter, dealer, agent and remarketing firm participating
in the distribution of any Debt Securities that are issuable as Bearer
Securities will agree that it will not offer, sell or deliver, directly or
indirectly, Bearer Securities in the United States or to United States
persons (other than qualifying financial institutions) in connection with
the original issuance of such Debt Securities.
For as long as Part III of The Companies Act 1985 remains in force
in relation to the Debt Securities or the Warrants, as the case may be,
neither the Debt Securities nor the Warrants may be offered or sold in the
United Kingdom, by means of this Prospectus, any Prospectus Supplement or
any other document, other than to persons whose ordinary business it is to
buy or sell shares or debentures (whether as principal or agent) or in
circumstances which do not constitute an offer to the public within the
meaning of The Companies Act 1985. All applicable provisions of The
Financial Services Act 1986 must be complied with in respect of anything
done or to be done in relation to the Debt Securities or the Warrants in,
from or otherwise involving the United Kingdom. Furthermore, each
underwriter, dealer, agent and remarketing firm participating in the
distribution of Debt Securities or Warrants will agree that it will only
issue or pass on to any person in the United Kingdom any document received
by it in connection with the issue of such Debt Securities or Warrants if
that person is of a kind described in Article 9(3) of The Financial
Services Act 1986 (Investment Advertisements) (Exemptions) Order 1988.
Once the provisions of Part V of The Financial Services Act 1986 come into
force in relation to the Debt Securities or the Warrants, no advertisement
may be issued in the United Kingdom offering the Debt Securities or the
Warrants, as the case may be, in circumstances which would require (for
the avoidance of any contravention of those provisions) a prospectus to
have been delivered to the Registrar of Companies.
LEGAL MATTERS
The validity of the Debt Securities and Warrants offered hereby will
be passed upon for the Company by Allan L. Ronquillo, Esq., Vice President
and General Counsel of the Company, and for any underwriters and agents by
Brown & Wood, New York, New York. Mr. Ronquillo will rely as to all
matters of New York law on the opinion of Brown & Wood, and Brown & Wood
will rely as to all matters of Michigan law on the opinion of
Mr. Ronquillo. Mr. Ronquillo holds 760 shares of Chrysler's common stock
and options to purchase 13,920 shares of Chrysler's common stock. Brown &
Wood may from time to time render legal services to the Company and its
affiliates.
EXPERTS
The consolidated financial statements and the related financial
statement schedules of the Company as of December 31, 1993 and 1992 and
for each of the three years in the period ended December 31, 1993
incorporated in this prospectus by reference from the Company's Annual
Report on Form 10-K for the year ended December 31, 1993, have been
audited by Deloitte & Touche LLP, independent auditors, as stated in their
reports, which are incorporated herein by reference, and have been so
incorporated in reliance upon the reports of such firm given upon their
authority as experts in accounting and auditing.
With respect to the unaudited interim financial information for the
periods ended March 31, 1994, June 30, 1994 and September 30, 1994, which
is incorporated herein by reference, Deloitte & Touche LLP has applied
limited procedures in accordance with professional standards for a review
of such information. However, as stated in their reports included in the
Company's Quarterly Reports on Form 10-Q for the quarters ended March 31,
1994, June 30, 1994 and September 30, 1994, incorporated by reference
herein, they did not audit and they do not express an opinion on that
interim financial information. Accordingly, the degree of reliance on
their reports on such information should be restricted in light of the
limited nature of the review procedures applied. Deloitte & Touche LLP is
not subject to the liability provisions of Section 11 of the Securities
Act for their reports on the unaudited interim financial information
because those reports are not "reports" or a "part" of the registration
statement prepared or certified by an accountant within the meaning of
Sections 7 and 11 of the Securities Act.
NO DEALER, SALESMAN OR ANY OTHER PER- $200,000,000
SON HAS BEEN AUTHORIZED TO GIVE ANY
INFORMATION, OR TO MAKE ANY REPRESEN-
TATIONS, OTHER THAN THOSE CONTAINED IN
THIS PROSPECTUS SUPPLEMENT OR THE PRO-
SPECTUS, IN CONNECTION WITH THE OFFER
CONTAINED IN THIS PROSPECTUS SUPPLE-
MENT AND THE PROSPECTUS, AND, IF GIVEN
OR MADE, SUCH INFORMATION OR REPRESEN-
TATIONS MUST NOT BE RELIED UPON AS
HAVING BEEN AUTHORIZED BY THE COMPANY
OR ANY UNDERWRITER. NEITHER THE CHRYSLER
DELIVERY OF THIS PROSPECTUS SUPPLEMENT FINANCIAL
AND THE PROSPECTUS NOR ANY SALE MADE CORPORATION
HEREUNDER AND THEREUNDER SHALL UNDER [Logotype]
ANY CIRCUMSTANCES CREATE AN IMPLICA-
TION THAT THERE HAS BEEN NO CHANGE IN
THE AFFAIRS OF THE COMPANY SINCE THE
DATE HEREOF. THIS PROSPECTUS
SUPPLEMENT AND THE PROSPECTUS ARE NOT
AN OFFER TO SELL OR A SOLICITATION OF
AN OFFER TO BUY ANY SECURITY IN ANY
JURISDICTION IN WHICH IT IS UNLAWFUL
TO MAKE SUCH AN OFFER OR SOLICITATION.
8 1/8% NOTES DUE 1996
----------------
TABLE OF CONTENTS
Page
PROSPECTUS SUPPLEMENT
Chrysler Financial Corporation. S-2 CHRYSLER FINANCIAL
Ratio of Earnings to Fixed [Logotype With
Charges....................... S-4 "Pentastar" Logo]
Information Concerning Chrysler
Corporation................... S-5
Description of Notes........... S-7
Underwriting................... S-8
Prospectus
Available Information.......... 2
Incorporation of Certain
Documents by Reference........ 2
Chrysler Financial Corporation. 3 SALOMON BROTHERS INC
Selected Consolidated Financial BEAR, STEARNS & CO. INC.
Data.......................... 5 MERRILL LYNCH & CO.
Information Concerning Chrysler
Corporation................... 9
Ratio of Earnings to Fixed
Charges........................ 11
Use of Proceeds................ 12
Description of Debt Securities. 12
Description of Warrants........ 18
Limitations on Issuance of
Bearer Securities and Bearer
Warrants...................... 20
Plan of Distribution........... 21 PROSPECTUS SUPPLEMENT
Legal Matters.................. 22
Experts........................ 23 DATED DECEMBER 5, 1994